US stocks’ torrid climb to start 2024 is evoking worrisome comparisons with past boom-and-bust cycles on Wall Street, sparking debate over the risk that the market is overheating. Yet, there are signs that the strength, based in large part on the economy’s resilience and robust corporate earnings, has not turned into a speculative frenzy. Several of the so-called Magnificent Seven stocks have sputtered, showing that investors are not throwing money at the market with abandon. Scott Chronert at Citigroup also notes that the seven megacap tech firms contribute roughly 20% to S&P 500 earnings, which he says largely justifies their market capitalisation weighting of about a third of the gauge. The relentless demand for the group’s shares drew parallels to the speculative frenzy surrounding internet stocks at the turn of the century.

Source: Irish Examiner March 10, 2024 19:49 UTC